Most investors lost money last year, but value investors lost far less. Globally, value stocks lost 7.5% compared to a 28.6% decline in growth stocks in 2022. And in the U.S., the value stock outperformance was the highest since the dot-com bubble in 2000.
There are two significant drivers of this outperformance. First, value stocks tend to outperform during bear markets due to their higher margin of safety. And second, rising interest rates are jeopardizing the cheap growth stocks that have relied on them over the past decade.
While there are many value-focused ETFs, active funds have the flexibility to pinpoint deep value opportunities. And high-conviction funds can help focus on the most promising opportunities. One of the newly-launched ETFs checks both of these boxes.
See our Active ETFs Channel to learn more about this investment vehicle and its suitability for your portfolio.
Active, High-Conviction Value
The Cambriar Aggressive Value ETF (CAMX) is a newly-launched active ETF providing exposure to a concentrated, best-ideas strategy in a streamlined and efficient wrapper. The fund seeks long-term capital appreciation by investing in a non-diversified portfolio of 20 to 30 high-conviction stocks in the U.S. (~70%) and internationally (~30%).
Currently, the fund’s most significant holdings include:
- Airbus SE (EADSY) – 6.00%
- Liberty Media C (FWONK) – 5.60%
- Energy Transfer LP (ET) – 5.40%
- SAP SE (SAP) – 5.30%
- Shell plc (SHEL) – 5.10%
The fund’s portfolio has an average price-earnings ratio of 12.3x, a price-book ratio of 1.9x, and a 1.2x debt-equity ratio. By comparison, the bigger and more established Vanguard Russell 1000 Value ETF (VONV) has an average price-earnings ratio of 14.6x and a price-book ratio of 2.05×.
“We believe the combination of increased tax efficiency and lower expenses, in conjunction with Cambiar’s long-standing price-sensitive investment discipline, results in an attractive proposition for investors looking to get greater exposure to high quality value businesses,” said President and CIO Brian Barish, portfolio manager of the new ETF.
Alternative Value ETFs
CAMX isn’t the only active fund offering exposure to value investments. As more mutual funds convert to active ETFs, investors have a growing number of options for exposure to the value investing theme.
Currently, these are some of the larget value-focused ETFs, including two active ETFs from Avantis:
| Name | Ticker | Expense | Assets | YTD Return |
| Dimensional U.S. Targeted Value ETF | DFAT | 0.28% | $7.4 billion | -2.37% |
| Avantis U.S. Small Cap Value ETF | AVUV | 0.25% | $5.2 billion | -3.58% |
| Dimensional International Value ETF | DFIV | 0.27% | $4.7 billion | 0.79% |
| Avantis International Small Cap Value ETF | AVDV | 0.36% | $2.6 billion | 0.76% |
| Vanguard U.S. Value Factor ETF | VFVA | 0.13% | $589 million | -5.13% |
Data from MorningStar as of March 16, 2023.
When choosing between these funds, investors should consider the managers’ strategy, portfolio make-up, and expense ratio. It’s also a good idea to look at risk-adjusted return metrics, such as the Sharpe or Sortino ratios, particularly with concentrated portfolios.
Don’t forget to check our Value Equity Funds page to explore more options.
The Bottom Line
Value stocks outperformed growth stocks in 2022 and that outperformance seems likely to continue as interest rates rise and the economy slows. Investors seeking exposure to value stocks may want to consider actively-managed funds with high-conviction portfolios for the best opportunities, including funds like the Cambriar Aggressive Value ETF (CAMX).
Take a look at our recently launched Model Portfolios to see how you can rebalance your portfolio.
